Pan American Silver (NASDAQ:PAAS) and AngloGold Ashanti (NYSE:AU) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.
Pan American Silver pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. AngloGold Ashanti pays an annual dividend of $0.05 per share and has a dividend yield of 0.3%. Pan American Silver pays out 35.9% of its earnings in the form of a dividend. AngloGold Ashanti pays out 9.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Pan American Silver has raised its dividend for 2 consecutive years. Pan American Silver is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Pan American Silver and AngloGold Ashanti’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pan American Silver||$784.49 million||4.06||$10.29 million||$0.39||38.95|
|AngloGold Ashanti||$3.94 billion||1.80||$133.00 million||$0.53||32.19|
AngloGold Ashanti has higher revenue and earnings than Pan American Silver. AngloGold Ashanti is trading at a lower price-to-earnings ratio than Pan American Silver, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
54.3% of Pan American Silver shares are owned by institutional investors. Comparatively, 38.0% of AngloGold Ashanti shares are owned by institutional investors. 12.9% of Pan American Silver shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for Pan American Silver and AngloGold Ashanti, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pan American Silver||1||3||3||0||2.29|
Pan American Silver currently has a consensus price target of $16.96, suggesting a potential upside of 11.64%. AngloGold Ashanti has a consensus price target of $17.35, suggesting a potential upside of 1.70%. Given Pan American Silver’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Pan American Silver is more favorable than AngloGold Ashanti.
This table compares Pan American Silver and AngloGold Ashanti’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pan American Silver||-0.34%||2.11%||1.60%|
Volatility & Risk
Pan American Silver has a beta of 0.14, meaning that its stock price is 86% less volatile than the S&P 500. Comparatively, AngloGold Ashanti has a beta of -0.78, meaning that its stock price is 178% less volatile than the S&P 500.
Pan American Silver beats AngloGold Ashanti on 12 of the 17 factors compared between the two stocks.
About Pan American Silver
Pan American Silver Corp., together with its subsidiaries, engages in the exploration, development, extraction, processing, refining, and reclamation of silver mines. The company owns and operates mines located in Mexico, Peru, Canada, Argentina, and Bolivia. It also produces and sells gold, zinc, lead, and copper. The company holds interests in the La Colorada, Dolores, Huaron, Morococha, La Arena, Shahuindo, San Vicente, Manantial Espejo, and Timmins mines. Pan American Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.
About AngloGold Ashanti
AngloGold Ashanti Limited operates as a gold mining company. It also produces silver, uranium, and sulphuric acid; and dóre bars. The company operates 14 mines and 3 projects in 10 countries in South Africa, Continental Africa, the Americas, and Australasia. AngloGold Ashanti Limited was incorporated in 1944 and is headquartered in Johannesburg, South Africa.
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